D Procurement Flashcards
When should you use the full form of NZIA SCC?
Projects of any size or complexity where a wide range of risks should be contained.
When should you use the short forms?
In relation to alterations or new building work of a simple nature, having a relatively low value, and capable of being completed in a reasonably short contract period.
What are the two NZIA construction contracts where the architect is administering?
NZIA SCC
NZIA SCC SF
What are the two NZIA construction contracts where the architect is not involved in the construction phase?
NZIA NBC - G
NZIA NBC - SW
Who owns the copyright for the NZIA contracts? Who can use the contracts?
The NZIA
Practices who are members of the NZIA and hold an Architects Document Set license.
Who is named as the architect in the Standard Conditions?
The NZIA Practice
Can you modify the standard conditions?
No. You can fill out the schedules and you can add information in the special conditions.
Describe the SCC Contract
A contract between principal and contractor for the construction of contract works of any size and complexity where the architect administers the contract on behalf of the principal.
Describe the NBC Contract
A contract between principal and contractor where the architect is not engaged to administer the contract.
When should you discuss procurement with your client?
As soon as possible in the design process. Different approaches to procurement may significantly influence the architect’s role, liabilities, and ability to provide a quality service.
What are the advantages for your client in using the NZIA SCC?
- Only generally recognised documents within the industry which provide for the role of an architect during construction.
- Familiarity with the standard conditions of tender and contract enable contractors to bid competitively.
- Wide use in the industry means it is simple for the architect to administer and easy for the contractor to comply.
- Architect’s role is well defined.
What should you advise your client to consider it they would like to use a different contract?
Professional Risk Limitations
Quality assurance limitations
Definition of the architect’s role
What is a GMP contract?
Guaranteed Maximum Price
Fixing the maximum price of a project at the completion of sketch or developed design where the contractor has the ability to vary the work to maintain price and programme.
GMP Advantages and Disadvantages for Principal?
- Quality is at risk
- Cost is fixed
- Time is fixed
GMP Advantages and Disadvantages for Consultant?
- Quality is at risk
- Consultant cost might be harder to define
- Time may be under pressure
- Potential liability risk, particularly if novated to the contractor.
GMP Advantages and Disadvantages for Contractor?
- May influence quality
- May have more control of cost
- Get to influence time, setting the time frame
What is cost/risk sharing in GMP?
The maximum cost of an element is agreed, and the savings difference is split once the true costs are known.
What is a CRC contract?
Cost Reimbursement Contract
Often known as charge up. Appropriate to use when it is difficult to be precise about total contract price at tender stage.
What should the contractor provide at Tender Stage if you are negotiating a CRC contract?
An estimate of cost and lump sum items where possible to establish a notional contract price - will be needed for insurance at the least.
What is a Guarantee?
Undertaking by a third party in favour of the first party to act in the event that the second party does not fulfil their obligations under the guarantee.
What is a Warranty?
An undertaking by one party to another (to make good defects in the contract works).
Example of guarantees?
Master Builders New Home 7-years Guarantee Agreement
What to consider for warranties?
What time period is normally offered?
Client expectations
Strength of the party offering warranty
Likelihood of needing it
List some common warranties
Tanking Roofing Aluminium Joinery Tiling Flooring Plumbing Electrical
Where are the required warranties listed?
In the specific conditions of the contract, and also in the specification.
When are warranties required?
In 3910 they are required before the defects liability period certificate can be issued. Others think it should be before practical completion is applied for.
Common sense says as soon as possible.
You should state when they are required in the contract.
Why is it best for the warranty to be with the main contractor (rather than the sub)?
- Your contract is with the main contractor
- MC chooses their own subs - we have little control
- MC often in better financial position to pick up defects.
How would you execute a warranty from a subcontractor?
In the manner required under the Companies Act section 180.
Varies company to company, but generally two directors will be required to sign.
What rights does the principal have in correcting defective work?
- Defects liability retentions
- Warranties
- Other legal remedies (CGA)
Why are there no general conditions of contract available for labour only contracts?
- There is not one contract, but several separate contracts with a lot of overlap.
- Each situation is different.
If there are still incomplete works at the end of defects liability, who determines the outstanding value?
The architect - needs to determine what it will cost the principal to do the required work. Not what the contractor says they can do it for.
Seek help from QS if needed.
If tendering, what documents should be made available to the tenderers?
Drawings and Specs Standard Conditions of Contract Copy of the Schedule of Quantities (if one exists) Tender Forms Tender Instructions
How long should you allow for a tender?
At least three weeks - but should be adapted to suit the project.
Can the architect share details of interested subcontractors with the tenderers?
Yes, and vice versa as increasing numbers of subcontractors may be beneficial to the client.
Consider when to do this as you don’t want them passing information around.
Can a tender be received by email?
Yes, if provided in the tender schedule specific conditions.
Can you accept a late tender?
No, it is invalid. You must return it to the tenderer unopened.
What should you do if a tender appears to be unreasonably low?
The architect should notify the tenderer so they can confirm or withdraw. Any tenderer may withdraw a tender before acceptance.
Once a tender is accepted, what do you send to the unsuccessful tenderers?
A list of the tendered sum submitted by each tenderer - though not usually identified - together with the name of the successful tenderer.
When does a contract exist (in a tender process)?
As soon as a tender is accepted (normally by letter of acceptance). Validity is not affected by any delay in signing the contract docs.
How many tenderers would be sufficient for competitive tendering?
Maximum of 6
What kind of trade summary might you use in tender?
T5 Schedule from NZIA
or Masterspec Tender Summary form.
What is a prime cost sum?
A material related monetary allowance. Does NOT include costs associated with installation.
Cost of materials + margin.